Equinix Closes $3.8 Billion TelecityGroup Deal, Consolidating Colocation Leadership In Europe

Equinix on Friday closed its $3.8 billion acquisition of European data center operator TelecityGroup, further consolidating the Redwood City, Calif.-based industry leader's global position in the retail colocation market.

Already far and away the world's largest colocation operator, after adding six facilities in Japan with the recent acquisition of Bit-isle, and more than 40 from TelecityGroup, Equinix now counts under its worldwide umbrella 145 data centers (after also making a few divestitures).

While Equinix strictly conducts an IT colocation and network-neutral interconnection business, its expansive global reach and direct network links to major cloud providers mean the company has "a high degree of relevance as to how things are playing out in the cloud world," Charles Meyer, Equinix's chief operating officer, told CRN.

[Related: Public Cloud Panorama: Synergy Breaks Down Multibillion Dollar Market]

That impact, Meyer said, extends to "both sides of cloud ecosystems" -- cloud service providers that lease Equinix infrastructure or directly connect to its facilities through the Equinix Cloud Exchange, and enterprises that host business applications in Equinix facilities and access cloud services through them.

The TelecityGroup acquisition was announced in May, putting the kibosh on another proposed deal through which the operator, which has its headquarters in London, would merge with Interxion, a Dutch rival.

The acquisition has doubled Equinix's capacity in Europe, giving the company unique scaling capabilities in some of the world's largest markets -- as well as some smaller markets that are emerging.

"This positions us as the clear choice for [cloud providers] in Europe and globally, given there are no other European vendors that can come close to touching our retail, interconnect and global footprint," Meyer told CRN.

"It's really another step in us continuing to ensure that our value proposition in terms of being the hybrid cloud hub for enterprise is continuing to gain momentum," Meyer said.

Equinix inherits more than 1,000 new customers from TelecityGroup. Among them are 200 networking and mobility providers, and more than 300 companies offering cloud and IT services.

The TelecityGroup facilities in Dublin especially give Equinix key nodes and capacity it can sell to service providers in a market considered an important entry point into Europe because of the hospitable Irish tech business climate.

Equinix has also gained presence in Nordic countries through TelecityGroup data centers in Stockholm and Helsinki. And the colocation operator is better positioned to penetrate emerging markets like Poland, Turkey and Bulgaria that Equinix believes, in the long-term, will gain importance in the overall global digital economy, Meyer said.

Equinix will integrate its Cloud Exchange with TelecityGroup's version of that service, Cloud-IX, bringing cloud operators doing business with the once disparate exchanges under a single roof.

That greater "density of service providers," Meyer said, will be parlayed "into relevance for enterprise customers who are finding Equinix is an efficient place to implement a hybrid cloud strategy."

Meyer said TelecityGroup was vetted before the acquisition to make sure its facilities meet Equinix's technical specifications and standards.

But all of the company's data center takeovers involve a degree of "Equinixization," Meyer said, to fully align the facilities from an operational standpoint, as well as a "look and feel" standpoint -- all Equinix facilities are illuminated by distinctive blue lighting.

A study from Reno, Nev.-based Synergy Research published in June described Equinix as the leading operator in the colocation industry, with a 9.5 percent market share. The only other company even above 6 percent share was Digital Realty, but those revenues were almost entirely from wholesale colocation, involving renting out entire data centers and not just computing resources.

No other provider in the first quarter of 2015, the period of the Synergy study, had even half of Equinix's retail revenues.

TelecityGroup came 10th in Synergy's rankings, with less than 2 percent market share.

PUBLISHED JAN. 15, 2016